FOMC Meeting Preview: Are Any Big Moves on Tap?

The two-day Federal Open Market Committee (FOMC) meeting began Tuesday and will culminate Wednesday afternoon with an announcement from Federal Reserve Chair Janet Yellen that is virtually guaranteed to be less exciting than the one that followed her first press conference.

The FOMC is expected to reduce Fed asset purchases by another $10 billion a month. Purchases of mortgage-backed securities and Treasury notes have dropped from $85 billion a month to $55 billion and are expected to drop again after this meeting.

No change in interest rates is expected now or indeed anytime soon. When Yellen seemed to indicate at her press conference last month that interest rates could rise sooner than expected, equities tanked and gold jumped. The next schedule press conference follows the June meeting.

One thing that we can watch for from Wednesday’s announcement is how the FOMC characterizes the U.S. economy — is it still growing slowly or is the pace picking up, is the housing market helping or hurting economic growth, will job growth improve? Little if anything has changed since last month, so the announcement ought to be pretty boring. Just the way your average central banker likes it.